Tag Archives: Oklahoma Supreme Court

What Happened on the Oklahoma Option?

Regarding the Dillard’s v. Vasquez ruling, I point everyone to the dissenting opinion, which is so insightful and succinct that all concerned parties should read it.

The majority’s opinions ruling the Oklahoma Option unconstitutional were predictable in light of a number of cases on which the justices have opined over the past several months. For the fully developed rationale behind my own rejection of their poor decisions, I refer you to an essay I wrote four months ago: “Why Oklahoma’s Title 85A Has Been Right for the Sooner State Since 1917.” Leaning heavily on that essay and the aforementioned dissenting opinion from Justice Winchester, I offer a few thoughts below.

See also: An Open Letter on the Oklahoma Option  

Grand v. Petit Bargain

In my aforementioned essay, I introduce the concept that the petit bargain replaced the Grand Bargain over the past half century. This evolution can be summarized as follows:

Genesis of the Grand Bargain circa 1910

  • Before the Grand Bargain, employers could use extremely powerful (and unfair) common law defenses when sued by employees who were injured on the job.
  • Importantly, the only legal exposures by employers prior to the Grand Bargain were limited to: a) defense costs and b) damages when found negligent.
  • The Grand Bargain was meant to adjust this arrangement by: a) minimizing legal costs while b) dumping the medical and lost wage expense of workplace injuries on the employer.
  • The employee, therefore, would have a mitigated but universal solution via a no-fault system.

Incremental Incorporation of the Petit Bargain circa 1960

  • The legal community was excluded from the Grand Bargain except in rare cases of dispute.
  • Since disputes led to involvement, attorneys found ways to expand the grounds for disputes.
  • Attorneys (both plaintiff and defense) have steadily increased their standing, sophistication of arguments and expenses in workers’ compensation (WC).
  • For all WC cases (win or lose, plaintiff and defense) medical AND legal expenses are billed to employers.
  • Dispute resolution became the norm in many states’ WC systems—with Oklahoma being near the top of that unfortunate list prior to the overhaul of 2013.

The above summary demonstrates deft, self-serving maneuvers by the legal community until 2013. Recent court decisions are less deft and more blatant in their promotion of antagonism between employers and employees. The above summary should also help explain statements such as the one below from Mark Schell, co-chair of the Oklahoma Injury Benefit Coalition (the lobbying force behind the statutory overhaul):

The OIBC will continue to work with the [l]egislature to preserve and improve the progress that this historic legislation has provided Oklahoma despite the opposition of those who cling to the old, more litigious system from which they benefited.

What concerned parties need to understand about Oklahoma politics is that the state bar association has a lot of control over who sits on the state’s Supreme Court. Justices are therefore subservient to the collective agenda of attorneys throughout the state. The petit bargain is a financial windfall for attorneys and judges. Eliminating the costs of these disputes is not a prospect they want to consider, because very few attorneys fare well when everyone is happy. To avoid that conversation, lawyers and judges pretend to be united in their commitment to traditional and patriotic notions of due process—notions that are misplaced in the world of Grand Bargain legislation, which is all about special adjudication (a distinction explained in more detail in my above-linked essay).

Gurich Opinion

The Gurich opinion bears some clarification, as her argument included multiple logical flaws that inattentive readers may have missed.

See also: The Pretzel Logic on Oklahoma Option

After offering a false dichotomy in her first sentence, Gurich spends several pages discussing the red herring of Texas nonsubscription. She follows that up with a straw man argument against the false narrative of ERISA before concluding with a classic equivocation in her misuse of “exclusive.” Logicians and rhetoricians throughout the nation should be impressed with her argument’s brazenness (if not its efficacy).

More important than detailing Gurich’s sophistries are Winchester’s comments in his concise dissent.

Next

Several months ago, we at WorkersCompensationOptions.com could see the writing of this decision on the wall, so we helped draft House Bill 2205, which addresses virtually all the concerns put forth by the Supremes yesterday. That bill had more than enough support last session to pass. We suspect the same will hold true this next session. It is now up to the legislature—as spokesmen of the citizens of Oklahoma—to determine what the next step is.

Where the Oklahoma Court Went Wrong

This essay takes issue with the Oklahoma Supreme Court’s recent decision in Torres v. Seaboard Foods to declare some workers’ compensation (WC) laws unconstitutional.

The problem with the opinions of Justices Edmonson, Combs and Colbert isn’t simply that they reached the wrong conclusion — but that they reached it for the wrong reasons.

To justify their decision, all three justices went out of their way to invoke the grand bargain, a historic compromise between employers and employees that guarantees medical and wage replacement benefits to injured workers. Before the grand bargain was struck in 1917, most U.S. employees injured on the job had to sue their employers for damages. The process was often prohibitively expensive, onerous and time-consuming for hardworking citizens who found themselves unable to earn a paycheck — when they needed funds to cover medical bills and other expenses during their convalescence.

The grand bargain is worth championing because it put an end to this intolerable state of affairs, thanks, in part, to luminaries such as Crystal Eastman, who thought an injured worker shouldn’t have to spend “nearly half of (his settlement) to pay the cost of fighting for it.”

See also: Taking a New Look at the ‘Grand Bargain’

Eastman’s emphasis on avoiding long, costly court battles was typical of the thinking that guided the U.S. into embracing the grand bargain.

It is therefore disappointing to see Justice Colbert argue that he is “forced to insure that claimants and employers in the (WC) system have their day in court.” Colbert’s rationale is contrary to grand bargain principles.

The only thing forcing Colbert to such a conclusion is his decision to put the interests of injury lawyers ahead of the interests of injured workers and of the employers who provide the benefits those workers deserve.

If the Oklahoma Supreme Court is as committed to preserving grand bargain principles as Justice Colbert claims, it doesn’t need to do anything revolutionary. It only needs to rule in the same way that it did in 1917, when it initially recognized the state legislature’s ability to pass special legislation concerning WC in the interest of the general public.

This article is the summary of a much longer essay on the topic, which draws on numerous primary and secondary sources and which you can find here.

An Open Letter on the Oklahoma Option

I’m the founder and CEO of WorkersCompensationOptions.com (WCO), a company dedicated to workers’ compensation (WC) and its legal alternatives. This letter is intended to quell the concerns of employees in our client companies—employees who may have been distressed by the recent (mostly negative) publicity from ProPublica and NPR regarding options to WC in Texas and Oklahoma.

In case you only saw one installment from the Insult to Injury series, I’ll provide a quick summary. In 2014, the project’s authors started to assimilate massive amounts of data from their research concerning each state’s (and the federal government’s) WC system. In March 2015, the authors began releasing articles with an indisputable premise: Collectively, these systems need improvement.

That commendable beginning eventually gave way, however, to a hypothesis that is supported neither by reality nor by the overwhelming quantity of data the authors provide. Their conclusion (that employers are in cahoots with insurers to pressure attorneys, anonymous doctors and legislators into discarding the lives of an unfortunate few for the sake of bolstering corporate profits) completely misses the mark in pinpointing why so many WC systems are broken beyond repair. In fact, attorneys and doctors put at least as much pressure on WC systems as insurers, and any attempt to depict the medical and legal communities as innocent bystanders in the WC feud is simply too naive to be taken seriously.[1] I do not doubt the authors’ sincerity in addressing a serious societal problem, but I also do not believe they are equipped to understand the problem they sought—however earnestly—to demystify for their readers. Worse yet, I fear they have positioned themselves in the WC space in a manner that is only likely to retard the implementation of practical solutions.

This letter is prompted by the article on Oct. 14, 2015, which painted an inaccurate—even an irresponsible—picture of both Texas nonsubscription (TXNS) and the Oklahoma option (OKO). As that article’s title (“Inside Corporate America’s Campaign to Ditch Workers’ Comp”) is lengthy, I’ll shorten it to CDWC going forward.

Texas Nonsubscribing Employees: What Can We Learn?

Texas is exceptional in the WC world because it has, for more than a century, offered employers a viable alternative to WC. Of approximately 380,000 employers in Texas, roughly two-thirds subscribe to a traditional WC system; the other third are nonsubscribers who develop their own models. That’s about 120,000 different systems, and there is plenty to be learned. We’ve seen various organically grown components develop from these disparate systems, many of which superficially resemble WC. Despite those similarities, however, industry experts understand how counterproductive it is to make unilateral comparisons between TXNS and WC.

The authors of CDWC didn’t get that memo.

Of all the various lessons learned from diverse TXNS models, one runs counter to conventional WC dogma: Employers can protect themselves while delivering superior care for employees at a fraction of the cost of WC. Eliminating the inflated costs associated with abusive practices that run rampant in WC is a critical component of that particular lesson.

Because the CDWC authors insist on judging TXNS through the lens of WC, TXNS looks to them like a system that would appeal to skinflint employers who simply do not care whether their employees get hurt. However, because employees of nonsubscribing companies can sue their employers for tort, the decision to opt out of WC is likely to be penny-wise and pound-foolish for employers who do not take measures to ensure the safety of employees. The CDWC authors’ failure to unpack the importance of tort negligence means many readers will come away from the article without understanding that a typical $50,000 payout in WC could easily be either $0 or $5 million in TXNS—depending on who is at fault for the accident. Even more disappointing is CDWC’s attempt, in a one-sentence paragraph, to gloss over one of WC’s most dangerous shortcomings: the extent to which the no-fault arrangement between employers and employees has removed incentives for safety in the workplace throughout the country.

If you are an employee of one of our Texas nonsubscribers, rest assured that your employer has every reason to minimize workplace accidents and to take very good care of you if an occupational injury occurs.

In a nutshell, your interests are aligned with your employer’s—another critical lesson we’ve learned from TXNS.

Oklahoma Option Employees: A Whack-a-Mole WC System Led You Here

ProPublica and NPR harp on a consistent theme throughout the Insult to Injury series: WC is broken. We at WCO agree, and Oklahoma may provide the single best example of how and why a state’s WC system becomes unsustainable.

The WC ecosystem is made up of five major communities: insurance, medical, legal, employer and employee. Abuse within the system by any of these communities leads to adjustments to the boundaries of the system. Throughout the Insult to Injury series, the authors go out of their way to sidestep the discussion of systemic abuse. They even attempt to dismiss fraud by citing a study that minimizes its role. Abuse and fraud in WC are, in some ways, analogous to speeding on the highway: Almost all drivers abuse the speed limit, but very few are issued citations. Similarly, the cases of clear-cut fraud in WC only reflect a small portion of the amount of abuse going on. But even if we allow the authors to exclude all instances of clear-cut fraud from the WC conversation, we are still left with rampant abuse driven by insidious systemic incentives.

For decades, abuses and inefficiencies within the WC system have led to each of the five communities touting the need for major reforms—at the others’ expense. Real reform threatens each community, which leads to stalemates in negotiations. Major upheaval has been avoided via the compromise of pushing and pulling the system’s boundaries, resulting in a decades-long game of whack-a-mole being played across the nation. If one voice cries, “Data shows an alarming trend in opioid abuse,” that mole gets swatted by requiring more medical credentials for prescribing pain killers. When another shrieks, “Overutilization is surging,” that mole is whacked through costly and time-consuming independent medical examinations. When someone else observes, “Our disability payouts are higher than neighboring jurisdictions,” that mole prompts us to lower disability payouts. Immediately, a fourth voice shouts, “Pharmaceutical abuses make up 8.4% of total costs,” and that mole persuades us to introduce drug formularies. But there isn’t even a moment of silence before another voice remarks, “Our analysis shows dismemberment payouts in this jurisdiction are lower than those of our neighboring jurisdiction.” That mole gets whacked by proposing legislation to increase dismemberment payouts—legislation that is dead on arrival.[2] At some point, we have to realize the moles are multiplying faster than we can whack them. (If my commentary doesn’t apply to other jurisdictions, I’m happy to restrict it to Oklahoma and Texas because writers can best serve their readers by acknowledging the limitations of their own expertise.)

Even if we concede that the changes detailed in the paragraph above aren’t necessarily bad (which I’m not conceding; I’m just trying to be polite and move the argument along), they demonstrate a persistent pattern of outcomes, inclusive of abuse, inherent in any hierarchical bureaucratic system. Regulators are busy reacting to entrenched abuses while market participants find new and exciting ways to game the system. This futile game of whack-a-mole is endless.

The Sooner State had a front row seat to witness what TXNS accomplished—both the good and the bad.[3] With that first-hand knowledge, the Oklahoma legislature has finally provided the state—and the country—with an opportunity to see whether real change can restore function to a malfunctioning system. While WC stakeholders assure us they are only a few more whacks-at-the-mole away from making WC hum, Oklahoma lawmakers have written a new chapter in the history of workplace accident legislation. The OKO is neither WC nor TXNS.

The brilliance of the OKO is that it doesn’t attempt to overhaul a broken WC system. The legislators effectively stepped away from that decades-old stalemate. Instead of an all-out overthrow, they left WC in place and created an option for employers who were willing to try something new—which is exactly how WC itself was introduced a century ago.

Because the OKO is substantially modeled on TXNS, it is easy to see why the CDWC writers conflated the two in their analysis. The errors in CDWC concerning ERISA’s applicability, employee benefits and appeals committee processes in Oklahoma are all presumably honest mistakes made by writers who, in their zeal to distinguish TXNS and the OKO from WC, failed to distinguish TXNS and the OKO from each other.

Nevertheless, it’s important for employees to understand that TXNS varies dramatically from one employer to another, and many of the rules concerning TXNS do not apply north of the Red River.

Although the CDWC authors misleadingly couple TXNS and the OKO with respect to ERISA’s applicability, ERISA plays no direct role in occupational accidents in the OKO.[4] We’ll be happy to get you a legal opinion on that, but for our purposes regarding CDWC, take my non-legal opinion as on the record. If others disagree, they should go on the record, as well. While ERISA has served employers and employees well in TXNS, its role in the OKO is only implied (if that). We are free to use it where we wish, as long as we are compliant at the state level.

Presumably tied to their ERISA misapplication, the CDWC authors assert that “benefits under opt-out plans are subject to income and payroll taxes.” Such tax advice is unusual from investigative journalists without citation, and I have asked the authors to share their source. Although the jury is still out on this tax issue, it is a point the CDWC authors must distort to substantiate their otherwise baffling claim that the workplace accident plans of OKO employers “almost universally have lower benefits.”[5] If any OKO plans really do offer benefits that aren’t at least as good as those provided by WC, they’re illegal. That’s how the legislators have written the law, and it’s what they’re dedicated to achieving for workers, regardless of obfuscations invoking TXNS, ERISA and unresolved tax implications.

The authors of CDWC also completely misrepresent appeals committees for at least a majority of OKO employers. The authors overlook a dramatic improvement to employee protection that the OKO makes to TXNS when they claim that appeals committees in Oklahoma work analogously to appeals committees in Texas: “Workers must accept whatever is offered or lose all benefits. If they wish to appeal, they can—to a committee set up by their employers.” That’s dead wrong. Executives at each of our OKO employers are fully aware that, in case of an employee appeal, the employer has nothing to do with the selection of the appeals committee panel members or the work they complete. The process is independent from the employer and extremely fair.[6] The CDWC authors would do well to read Section 211 of the law more carefully.

On the subject of benefit denials, I’ll share a single data point from our OKO book: To date, we have denied exactly one claim. This is a nascent system, so we must be very careful in drawing actuarial conclusions. Still, our company has led more employers from traditional WC into the new OKO than any other retailer, so we have a bit of credibility to offer on this subject. The point of the system isn’t to deny benefits to deserving employees but to ensure benefits are delivered more efficiently. The system is working.

The CDWC authors only provide one OKO case study, Rachel Jenkins. Strangely, they lump Jenkins in with four TXNS case studies. The Jenkins case is still being tried. We will withhold opinions—as we hope others would—until a more appropriate time.

As a reminder, while the OKO law is stronger today than ever, if it were to be deemed unconstitutional by the Oklahoma Supreme Court, we would have 90 days to get everyone back into traditional WC (per Section 213.B.4.).

Next: Vigilance and Diligence

My comments are mine and mine alone. I do not speak for any associations or lobbyists. I have no interest in debating those who inexplicably assume that any alternatives proposed to a failing system must stem from sinister motives. However, I encourage anyone (from prospective clients to employees of existing clients) with questions or concerns to call me.

Another option for learning more is to click here and watch a formal debate regarding the OKO. This footage was shot in September 2015. It features Michael Clingman arguing against the OKO while I, predictably, argue for it. One thing you can’t miss in that video is my desire to oust most attorneys from the scene. To help explain, I’ll adapt a quotation from John F. Kennedy (who was discussing taxation) to my own area of concern (the well-being of employees): “In short, it is a paradoxical truth that employee outcomes from increased WC protections are worse today, while economic results suffer, and the soundest way to create higher and better standards of living for employees is to eliminate these abused protections.” For philosopher kings, the theory of the OKO may not sound as good as the theory of WC, but when it comes to practical realities the results demand everyone’s attention.

To summarize my primary criticism of Insult to Injury, it simply hasn’t done enough. The story it tells is insufficient and smacks of partisanship and ideology, two biases that ProPublica’s journalists allegedly avoid. WC is substantially more complex than a corporation-out-to-exploit-its-workforce short story. Ignoring abuse in each of the communities in a five-sided WC debate demonstrates a lack of journalistic impartiality and a stunning deficiency of perception. Moreover, to my knowledge, ProPublica hasn’t crafted any relevant suggestions for legislation, simply leaving its readers with the vague and implicit notion that federal oversight is needed. If that is the goal of Insult to Injury—to provide one-sided, emotional yarns alongside a treasure trove of data, hoping it will all spur some federally elected officials to create real change at long last—then I suspect ProPublica will still be holding this subject up to the light of opprobrium upon the retirement of each of the series’ authors.

We do not aspire to win over the authors or even their followers. We will focus our energies each day on providing the best workplace accident programs for employers and employees alike. Our results should speak for themselves.

Finally, I am not an attorney, and nothing in this letter should be taken as legal advice.

Sincere regards,

Daryl Davis

Footnotes:

[1] With medical providers, overutilization is always a concern. Click here and watch the video from the 12-minute to the 15-minute mark for a detailed description of rampant WC abuse by surgeons who provide unnecessary and damaging back procedures. If the workers weren’t disabled prior to the surgeries, many were afterward. As for the legal community, simply view slide 73 of the NCCI’s 2013 Oklahoma Advisory Forum. WC disability payments, which is where attorneys get their cut, were 38% higher in Oklahoma than in neighboring states—not because jobs are 38% more dangerous in Oklahoma than in Kansas or Texas but because Oklahoma attorneys are 38% more effective at gaming the state’s WC system.

[2] Alabama SB 330—which was prompted by Insult to Injurynever got out of conference. From what I could gather, lengthy negotiations between several different interest groups led nowhere, with the Alabama Medical Association at the center of this particular stalemate. Not surprisingly, the two special sessions called by Alabama Gov. Bentley in 2015 were strictly focused on the state’s budgetary crisis; this bill was never discussed.

[3] The final Texas case study offered in CDWC deals with Billy Walker, who fell to his death while on the job. The upside to TXNS is his estate’s common law right to pursue a tort lawsuit against his employer. The employer could have been ordered to pay Walker’s estate a settlement in the millions, but the employer filed bankruptcy before any such judgment could be awarded, which is plainly an unacceptable outcome. This demonstrates a lack of surety—the single biggest problem in TXNS. OKO addresses this issue in various ways, most notably in Section 205 of Title 85A, which guarantees surety for injured workers.

[4] For the non-occupational components of your OKO program, ERISA does apply.

[5] Per Section 203.B. of the statute, compliant plans “shall provide for payment of the same forms of benefits included in the Administrative Workers’ Compensation Act for temporary total disability; temporary partial disability; permanent partial disability; vocational rehabilitation; permanent total disability; disfigurement; amputation or permanent total loss of use of a scheduled member; death; and medical benefits as a result of an occupational injury, on a no-fault basis, with the same statute of limitations, and with dollar, percentage and duration limits that are at least equal to or greater than the dollar, percentage and duration limits contained in Sections 45, 46 and 47 of this act.” (Emphasis mine.)

[6] Details of OKO appeals committee procedures are generally misunderstood—for now—by plaintiffs’ attorneys (and, apparently, investigative journalists). Attorneys frequently assume that, because the employer foots the bill, the employer controls the process. For a peek at how the appeals committee process really works for a majority of OKO employers, those curious should watch this video.

Debunking ‘Opt-Out’ Myths (Part 5)

Option programs in Texas and Oklahoma produce substantially less litigation than workers’ compensation systems do, which provides a powerful endorsement for states considering such programs.

A look at litigation for workers’ compensation and option programs must consider three main exposures: (1) claims for employer liability, (2) claims that the law violates the particular state’s constitution and (3) claims for wrongful denial of benefits.

Claims for Employer Liability

Public policymakers have long understood that it is not fair to require employers to pay a high level of statutorily mandated injury benefits and also be exposed to legal liability damage claims regarding the cause of injury. There are several approaches available to state legislators in striking that balance in a workers’ compensation system or an option to workers’ compensation, but each approach must reflect this inverse relationship between the extent of an injury benefit mandate and the extent of employer exposure to liability.

Employer exposure to liability has been almost entirely removed from workers’ compensation systems because of extensive benefit mandates that include medical coverage for life. However, the option to Texas workers’ compensation takes the opposite approach. It has no injury benefit mandates but exposes employers to broad liability for negligence.

That formula will be pursued by few, if any, other state legislatures because of the risk that certain irresponsible employers would provide no injury benefit coverage to their workers. However, the Texas option liability exposure does provide an additional incentive for employers to focus on workplace safety. It also provides employers with an incentive to make a strong commitment to take care of the injured employee’s medical and indemnity needs.

Employer liability exposure under the Texas option is real. There have been more than 80 liability settlements or judgments of $1 million or more. This unlimited risk of liability is ever-present.

However, option programs experience less than half as many disputed claims as the Texas workers’ compensation system (which is widely acknowledged as the one of the best-performing systems in the U.S.). The tiny percentage of disputed option claims is, primarily, because of legal requirements to fully communicate all rights and responsibilities (at program inception and continuing) in language that employees can understand — a requirement that is quite hard to find within any workers’ compensation program.

Option programs are also legally required to use claim procedures that ensure a full and fair review of benefit claims, including access to state and federal courts.

Yet only 1.5% of Texas option claims have any attorney involvement, and less than one in 1,000 liability claims actually go through formal litigation. So, this liability exposure has a positive impact on workplace safety, while still proving to be manageable and fully insurable in a highly competitive option marketplace.

It took more than a decade for the insurance industry and case law development to create the current balance that is delivering injury benefits to more than 95% of Texas workers through either workers’ compensation or option injury benefit plans. The existing Oklahoma option and the proposed Tennessee and South Carolina options all mandate some level of injury benefits and reduce employer exposure to liability to simplify the public policy debate and avoid this long period of industry maturation.

Constitutional Challenges

In existence for more than 100 years, the Texas option has never faced a challenge on constitutional grounds. Texas courts have long respected an employee’s right to work, employer rights to tailor employee compensation and benefits and the legislature’s right to determine an appropriate balance between mandated injury benefits and employer liability exposures.

The Oklahoma Supreme Court has now twice rejected lawsuits challenging the constitutionality of the Oklahoma option in 2013 and 2015. Oklahoma trial lawyers have filed more than a dozen lawsuits at the Oklahoma Supreme Court challenging the constitutionality of the 2013 workers’ compensation reforms. Oklahoma courts may further consider different provisions of the option law, but attorneys from the claimant and defense bar now agree that the Oklahoma Employee Injury Benefit Act is here to stay.

Oklahoma and Texas employers can freely move into and out of the workers’ compensation system at any time. So, even if the Oklahoma option is ever stricken down on constitutionality grounds (as unlikely as that prospect is), the law provides a 90-day grace period for employers to move back into workers’ compensation, without penalty. Similar provisions are in the pending Tennessee and South Carolina legislation.

Claims for Wrongful Denial of Benefits

Day-to-day legal challenges by injured workers regarding their rights to benefit payments are a normal feature of all workers’ compensation systems, and the same is true of option injury benefit systems. It is an unfortunate fact of life that, as with any line of insurance business, not every claim will be handled well. But as we have seen in Oklahoma over the past year and in Texas for more than two decades, dramatically fewer claims are disputed by injured workers under option programs.

Twice as many Texas workers’ compensation claims for benefits are disputed as compared with Texas option claims. This is true even when combining all injury benefit plan disputes and employer liability disputes under the Texas option.

Option opponents love to allege these programs only save money by failing to fully compensate injured workers. But, if this were true, why do we see fewer disputes in option programs?

Option program savings are achieved through more employee accountability for injury reporting, earlier diagnosis, persistent medical care from the best providers and more efficient resolution of fewer disputes. Option programs help ensure that employers and injured workers are communicating, engaged at the table (with or without legal counsel) and working together for better medical outcomes and return-to-work. This model must be contrasted with employers and injured workers routinely fighting through the complexity contained in thousands of pages of workers’ compensation statutes, regulations and case law that necessitate attorney involvement for basic system navigation.

A large cadre of workers’ compensation claimants and lawyers can be found in the hallways and hearing rooms of the Oklahoma and other state workers’ compensation commissions and courts on any given day. But there have been few day-to-day Oklahoma option benefit challenges. Oklahoma option programs now cover more than 22,000 workers, and almost every claim that has arisen over the past year has been fairly and efficiently resolved through the injury benefit plan’s claim procedures — essentially the same claim procedures that have applied to private employer group health and retirement plans across the U.S. for more than 40 years.

Over the span of 26 years in Texas and the past year in Oklahoma, not one state or federal employee has ever been hired to specialize in the oversight or administration of the approximately 50,000 option injury program claims that are successfully resolved every year. In contrast, tens of millions in taxpayer dollars are spent in many states every year to oversee and administer day-to-day workers’ compensation claims.

As further testimony to employee appreciation for the full disclosure of their rights and responsibilities under option injury benefit plans and the customer service they receive, not a single workforce in the past 26 years has organized a union as a result of the employer electing an option to workers’ compensation in Texas or Oklahoma. For workforces that are already unionized, their members and leadership appreciate the fact that option programs routinely pay a higher percentage of disability benefits, with no waiting period and no (or a higher) weekly dollar maximum.

Plus, disability benefits are paid on the employer’s normal payroll system, which allows employers and injured workers to seamlessly continue deductions for group health, retirement, child support and union dues. Successful Texas option programs have been in place for many, many years that cover textile, communications, food and commercial workers, teamsters and other collective bargaining units.

Conclusion

With liability exposures clarified and injured workers clearly more satisfied and getting better, faster under option programs in Texas and Oklahoma, legislators and employers in other states no longer need to “wait and see.” Single-digit annual cost savings can still be achieved through traditional workers’ compensation reforms, but option-qualified employers are seeing strong, double-digit cost reductions. Option programs support tremendous productivity, reinvestment and economic development gains for injured workers, employers and communities.

So, in spite of rhetoric from trial lawyers trying to survive and from their allies in the workers’ compensation insurance industry who fear free-market competition, there is no reason why workers’ compensation option legislation and program implementation should not be pursued by state legislators and employers as fast as their other priorities permit.

Debunking ‘Opt-Out’ Myths (Part 3)

This is the third of eight parts. The first article in the series is here. The second article in the series is here.

Workers’ compensation is a mysterious realm. Just pick a state. Even those of us who regularly read workers’ compensation statutes, regulations and official government websites have great difficulty triangulating the truth about basic rights and responsibilities for injured workers.

The little communication provided to injured workers tends to be oversimplified, leaving them no choice but to hire a lawyer to navigate the system. In fact, armies of trial lawyers, insurance and claims personnel and government employees are needed for basic functions of workers’ compensation systems. These armies then find much to argue over, which drives an endless pursuit of “reforms.” Even the industry’s biggest proponents and thought leaders complain of dysfunction. OSHA has also now joined the chorus claiming that workers’ compensation systems “add inequality to injury” and shift too much cost to injured workers and other government programs.

Against this backdrop, we’ve seen the Texas “nonsubscriber option” (often referred to as “opt-out”) grow to cover considerably more than one million workers and successfully handle more than 50,000 injury claims a year. A more highly regulated “Oklahoma option” launched in 2014 and has withstood two challenges at the Oklahoma Supreme Court.

Statistically credible data demonstrates that better outcomes for employees can be achieved through more deliberate, easy-to-understand communication that supports requirements for employee accountability. Such simple injury management principles have resulted in billions of dollars in employer savings and economic development.

Now, both Tennessee and South Carolina are considering option legislation, with several other states wondering if they should do the same.

Having worked on legislation and regulatory systems related to option programs for more than 25 years, I can understand the initial confusion and distrust by option opponents. Moving from a hyper-regulated, almost exclusively state-regulated system to a more free-market alternative that relies on a combination of state and federal laws takes people out of their comfort zone. They have legitimate questions that deserve good answers.

But too much of the discussion to date has been devoid of any spirit of inquiry. Workers’ compensation carrier associations issue fallacious descriptions of the purpose and mechanics of option programs. Allegations by plaintiff attorneys in lawsuits are quoted by workers’ comp industry media as irrefutable facts. Instead of research, option opponents attempt to promote class warfare while falsely disparaging reputable employers.

In the midst of this chaos, only one thing is sure: We are in a period of transition, and the facts will emerge, one way or the other.

In-depth information about options to workers’ compensation is more accessible every day. For those who are willing to have a reasoned public policy dialogue and information exchange, a path of progress emerges. For those who prefer uninformed hostility over homework, their true intentions will become more obvious, and their voices will be less credible as the days go by.